Tales and Opinion from the Front End of Credit Broking

Monthly Archives: December 2013

Today the European Parliament passed what is called the “European Mortgage Credit Derivative”.

This is a new set of rules which unify mortgages taken out anywhere in the EU. Some of these rules have already been factored in for April next year in the UK when the Mortgage Market Review comes into force. This means individuals seeking new mortgages will be asked more questions around affordability not just now but for the future should interest rates rise.

It’s not very well publicised yet but it may have an effect on your mortgage application come April 2014. The most likely effect will be you may need to produce more documentation to the lender and go through a more comprehensive advice interview with your adviser. Mortgage Solutions reports on some of these things today in their article.

There will be more articles published around the review in the New Year.

No not Christmas… REGULATION, and the FCA’s naughty list is a far worse place to be than Santa’s little Black Book.

The soon to arrive FCA Regulation of the secured loan marketplace is long overdue and should be welcomed by enlightened stakeholders with open arms, yet to some the spectre of regulation is making the cracks all too apparent.

Personally I don’t see the big deal, my ethos is to show up to the office, call FCA regulated firms offering my services, provide an excellent, compliant service to their customers and my intermediaries alike, then pay them what I have promised to pay them.

Those that do not engage in the secured loan marketplace, don’t because they have made an educated decision based on the level of training they have endured and do so based on current regulatory frameworks. If an IFA deems a packagers product portfolio to be inferior to his mortgage offering, we can present the advantages of the secured loan, even question his wisdom at electing to mortgage a client, but surely, until we are regulated and qualified to the level of the IFA it is not our place to castigate them.

Regulation will not change that, regulation won’t change what I do one little bit, and regulation will not change what that IFA does either.

Yet in what appears to be a display of panic, some contemporaries seem to think that they can wag the dog, that they can preach to those who have known nothing other than regulation by the FSA/FCA, be derogatory about the very mouths that feed the industry.

Will a network embrace my service if I castigate it and its members? Unlikely

Will I change the minds of those who do not currently look to secured loans as an alternative by attacking them from my pulpit of ignorance? Unlikely

Over time, will those individuals engage with us because we demonstrate the ethics, service and knowledge that they demand? Absolutely

Regulation will change nothing in terms of business flows, those that use a preferred secured loan provider will continue to do so, those that don’t will need convincing that we aren’t all trying to teach them to suck lemons.

What regulation will change is the working practices of firms that are presently not compliant, it will uncover previously undisclosed bad practice, and it will extract rogue firms from the marketplace; perhaps that is reason enough for some to panic!